Location: Bingham County, ID | Metro: Bingham County, ID
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 83218 reveals some interesting dynamics regarding the potential for Section 8 properties. The Fair Market Rent (FMR) for a two-bedroom apartment in the area is set at $1,010 annually for fiscal year 2026, based on metro-level data. In contrast, the market rent for a similar unit stands at $775, derived from Census ACS.
To calculate the gross yield for a property in this ZIP code, we must first understand that the median home value is currently unavailable. This presents a challenge in determining an exact cap rate, but we can still derive a rough picture of the gross yield for both scenarios.
In the case of using the Section 8 FMR of $1,010, the annualized income would be higher compared to the market rent of $775. However, the lack of median home values means we cannot precisely calculate the implied gross yield. But let's consider what we do know. With a renter density of 19.3%, it indicates that less than a fifth of the population in ZIP 83218 are renters. This suggests that the rental market might not be as robust as in other areas with higher renter densities.
The days on market (DOM) figure is also not available, which could provide insight into how quickly rental units are occupied. Without this data, we cannot definitively say whether the higher FMR or the lower market rent scenario is more realistic. However, given the lower renter density, it is reasonable to infer that the market rent scenario might be more reflective of the actual demand in the area.
While the FMR provides a guaranteed income level, it does not necessarily reflect the broader rental market conditions. Landlords and small-portfolio investors should consider the local rental market's strength and the potential for vacancy when deciding between Section 8 contracts and market-rate rentals. The higher FMR could be advantageous if securing a steady stream of income is the priority, but it may come with additional administrative burdens and limitations on tenant selection.
In conclusion, while the annualized FMR of $1,010 offers a higher gross yield compared to the market rent of $775, the lower renter density in ZIP 83218 suggests that market-rate rentals might better align with the actual demand. Investors should weigh these factors carefully to determine the most suitable approach for their portfolio.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.